Wednesday, August 7, 2013

S&P Downgrades Basler Kantonalbank's Senior Unsecured Debt because of U.S. / Swiss Bank Spat (8/7/13)

S&P has downgraded Basler Kantonalbank's  "senior unsecured debt rating" because of the ongoing Swiss bank spat with the U.S., citing "the risk of a 'material' one-time legal cost."  Giles Broom, Swiss Cantonal Bank Cut by S&P Amid Risk of U.S. Legal Costs (BloombergBusinessweek 8/6/13), here.  Key excerpts:
“We foresee ongoing elevated reputational and legal risk at BKB from pending legal actions by the U.S. Department of Justice against Swiss banks,” S&P said after meeting with the management of the company. “We have factored into our assessments a material one-time legal cost for BKB.” 
The Department of Justice is investigating banks, including Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER), after last year indicting Wegelin & Co. UBS AG, Switzerland’s largest bank, avoided prosecution in 2009 by paying $780 million, admitting it aided U.S. tax evasion and handing over data on 4,500 accounts. S&P didn’t disclose a figure for Basler’s legal costs, which the ratings company said would be offset by earnings.

No comments:

Post a Comment

Please make sure that your comment is relevant to the blog entry. For those regular commenters on the blog who otherwise do not want to identify by name, readers would find it helpful if you would choose a unique anonymous indentifier other than just Anonymous. This will help readers identify other comments from a trusted source, so to speak.